It seems the lockdown dreams of the life of a freelancer were cut short for many self-employed during lockdown. It has been reported by the ONS (Office for National Statistics) that over a quarter of a million self-employed workers returned to full time employment during the COVID crisis, we assume as the result of the ground opening up and no viable safety net being there to catch them financially, unlike many of their employed peers.
Yes, we already reported how many freelancers were left up the creek without a paddle as a result of COVID bringing virtually every industry to a grinding halt, and many freelancers who weren’t under the protection of an umbrella company or who fit the criteria for financial support had to find some way to bring in the cash, quickly. It was estimated that over 2 million freelancers were excluded from any form of government support during the lockdown.
A whopping 253,000 contractors returned to full time employment between April and July of this year – over a quarter of a million. This was in stark contrast to the continuing upward trend for freelance working prior to COVID, which saw over 5 million UK residents (a record high) claiming to be self-employed.
This change not only hits the individual self-employed workers, but is also a hit to the economy, thanks to the £300bn plus that self-employed workers generate for the economy each year.
But a lack of security and an uncertain future could see the next few months trending in the same direction, with more people chasing the security of paid employment as the risk of a second wave, further regional lockdowns and higher levels of unemployment are all anticipated in the short term.
This uncertainly is also underlined by the looming IR35 changes (it feels that not a week passes where we don’t mention IR35), and hints from the Chancellor that he intends to increase the cost of National Insurance contributions for freelance workers in the coming months.
The truth is, there is a cost to working for yourself. And unfortunately, that cost is increasing. Yes, you may have the freedom and flexibility that those in employment may dream of, but it comes at a price. And is seems that it’s a price that fewer of you are willing to pay.